Date: Sat, 18 Jun 1994 23:06:34 -0400 (EDT) From: Competitive Enterprise Institute Subject: CEI LIST - JUDGE BREYER'S CLEAR-HEADED VIEWS ON REGULATION To: Jeff Chan JUDGE BREYER'S CLEAR-HEADED VIEWS ON REGULATION By Jonathan Tolman, CEI environmental policy analyst and adjunct scholar with the Alexis de Tocqueville Institution appeared in *The Washington Times*, 5/25/94 "The challenge of creating a government institution that acts wisely has been with us since Plato," said Judge Stephen Breyer in an interview with the de Tocqueville Institution, from his office in Boston a few months ago. It is unusual for a sitting judge to delve into the intricate policy issue of reinventing government, especially when he is the Chief Judge for the First Circuit Court of Appeals and now President Clinton's choice for the U.S. Supreme Court. But in his recent book, *Breaking the Vicious Circle*, Judge Stephen Breyer does just that, and in the process indicts the current regulatory system. He accuses the regulatory process of wasting both government and private resources, as well as diverting attention away from true health and environmental risks. While it is replete with failures, Judge Breyer identifies three basic problems endemic to the current regulatory system, which he calls tunnel vision, random priority setting, and inconsistency. As an example of tunnel vision, Judge Breyer points to a Superfund dispute which came before his court, United States v. Ottati & Gross. The toxic waste dump in dispute had already been mostly cleaned up. In fact, the site was clean enough so that any children who happened to be playing there could eat small amounts of dirt for 70 days annually, without suffering any adverse health effects. The reason the case ended up in Breyer's court was because the Environmental Protection Agency was demanding that the company spend an additional $9.3 million to make the soil on the site clean enough for children to eat small amounts of dirt for 245 days of the year. This might be justifiable if the site were destined to become a kindergarten playground. The site in question, however, was located in the middle of a swamp. The dirt-eating children didn't exist. In addition, the EPA admitted that much of the remaining waste would evaporate by the year 2000. Tunnel vision is the outcome of a single-minded agency, with employees assigned to single-minded tasks, carrying out a single- minded goal. The current system, however, is plagued not only with tunnel vision; it also lacks any semblance of a rational scheme. "One cannot find any detailed federal government list that prioritizes health or safety risk problems so as to create a rational, overall agenda -- an agenda that would seek to maximize attainable safety or to minimize health related harms," writes Judge Breyer. In 1990, the EPA's Science Advisory Board released a study showing that the EPA's existing priorities bear little if any relation to actual public risk. For example, the public generally rates industrial pollution of waterways as a high risk. The EPA's scientists, on the other hand, ranked it as a low risk. Conversely, the EPA's scientists ranked indoor air pollution as a high risk, while the public rated it low. The EPA's scientists know which health problems pose the greatest risk. However, that appears immaterial in terms of actual program funding for those health problems. The third problem is one of inconsistency. It is not uncommon for regulators to ignore the effects of one program or regulation on another. For example, one of the EPA's proposed rules for sewage sludge disposal was designed to save one statistical life every five years. However, the restrictions in the rule would lead to an increase in incineration of the sludge, which was likely to cause two statistical cancer deaths a year. In short, the rule was theoretically killing more people than it saved. The root causes behind these problems form what Judge Breyer terms the vicious circle of growing tunnel vision, random agenda setting and inconsistency. According to Judge Breyer, the first element in the vicious circle is the public's perception of risk. The public places a greater concern on what it believes is a high risk, not necessarily what is scientifically high risk. In essence, human psychology has failed to keep pace with technological change. People instinctively fear what they do not, or cannot, understand. Judge Breyer, however, avoids the trap of blaming the problems of regulating risk on an ignorant public. "Hardly anyone has the time to take courses in risk analysis," said Breyer. He argues that it is futile to expect the public to be knowledgeable about the health effects of such things as minuscule quantities of unpronounceable organic compounds. Neither should it be their responsibility. Consequently, public reaction is highest, not necessarily in the areas of greatest risk, but in the areas of greatest uncertainty. The press fuels this popular imagination of risk by printing stories about the unusual and the prominent while ignoring the often larger everyday risks. A single car accident rarely makes the front page, while a nearby toxic waste dump does. Judge Breyer accurately points out that it should not be surprising that a public that hears and reads about Love Canal, Times Beach, Alar and asbestos is inordinately concerned about these risks. On the other hand, people jump into their cars and race down the freeway at 80 miles an hour without a second thought. "A second element of the circle consists of Congressional reaction to perceived risk and to regulatory problems, which takes the form of detailed statutory instruction," writes Judge Breyer. He argues that Congress is, in fact, institutionally unsuited to write detailed regulatory instructions that work effectively. Congress passes laws one at a time, rarely considering the effects of the legislation on other programs. Nor does it systematically prioritize health threats on the basis of the scientific risk. The third and final link in the vicious circle is what Judge Breyer calls uncertainties of the regulatory process. He points to typical problems that are associated with regulating health risks. For example, if a chemical given to rats in huge doses causes cancer, does that mean it will cause cancer in humans? If so, what levels of the chemical are safe to eat? We can't routinely put humans in laboratories and test them like guinea pigs, so how do we know when a substance can be considered safe? "The fact that it is frightening people is no excuse for those in charge of public policy to act irresponsibly," said Breyer. Regulatory agencies continually fail to eliminate the uncertainties in the regulatory process. They take the path of least resistance which consists of choosing the bureaucratically easy option, regardless of its economic or scientific merit. In this regard, the Congress is debating legislative proposals sponsored by Sen. Daniel P. Moynihan and Sen. J. Bennett Johnston to increase the use of risk assessment techniques (based on sound scientific principles) and cost-benefit tests for environmental regulation. In fact, Mr. Johnston's amendment requiring EPA to perform cost benefit and risk assessment tests on all new environmental regulations recently passed the Senate by a vote of 90 to 8. When it comes to addressing health and environmental questions, the EPA, the environmentalists and Vice President Al Gore ought to take a page out of Judge Breyer's book. _______ __________ ___________ / | / | | | |__________ | | | | \ | | \ _______ |__________ ___________ COMPETITIVE ENTERPRISE INSTITUTE 1001 Connecticut Ave. NW #1250 Washington, DC 20036 202-331-1010, fax 202-331-0640 Permission to copy granted as long as these lines are left intact. To subscribe to the cei list, send a message to cei@digex.com. "The Virtual Hand: CEI's guide to the information superhighway" is available for $5. CEI's monthly newsletter, "CEI UpDate," is free to contributors of $25.